EVOLUTION OF OIL AND GAS INDUSTRY IN INDIA :-

At Independence, India's domestic oil production was just 250,000 tones per annum. The

entire production was from one state-Assam. Most foreign experts had written off India as far

as discovery of new petroleum reserves was concerned. The Government announced, under

Industrial Policy Resolution, 1954, that petroleum would be the core sector industry.

Preamble

Petroleum exploration & production was controlled by the Government-owned

National Oil

Companies (NOCs), ONGC and OIL, in pursuance of the Industrial Policy Resolution, 1954.

In the early 70s, they supplied nearly 70% of the domestic requirement. However, by the end

of the 80s, they had reached the stage of diminishing returns. Oil production had begun to

decline whereas there was a steady increase in consumption and today the two NOCs are

able to meet only about 35% of the domestic requirement. This was further compounded by

the resource crunch in the beginning of the 90s. The Government had no money (FE) to give

to the NOCs for the development of some of the then newly discovered fields. While some of

these fields could be developed by ONGC (Gandhar, Neelam, Bombay High, Lakwa, Heera,

Geleki etc.), for others there was no money available for indigenously developing the fields.

The problem had elements such as the administered oil price, non-availability of appropriate

technology, logistics etc

Petroleum Sector Reforms, 1990

The Government launched the Petroleum Sector Reforms (PSR) in 1990. Till then, three

rounds of exploration bidding had been gone through with no success in finding new oil/gas

deposits by the foreign companies who only were allowed to bid. Under the PSR, the Fourth,

Fifth, Sixth

Seventh and Eighth Rounds of exploration bidding were announced between 1991 and

1994. For the first time Indian companies with or without previous experience in E&P

activities were permitted to bid starting with the Fourth Round.

The Government then announced the Joint Venture Exploration Program in 1995. The

exploration blocks were in those areas for which the Petroleum Exploration License was with

the NOCs and they were required to have a 25% to 40% Participating Interest from day one.

Foreign Companies in Exploration in India

Foreign companies entered the Indian E&P scene since early fifties (Indo Stanvac Project- A

Joint Venture between Government of India and Standard Vacuum oil Company for West

Bengal onland in early fifties, Carlsbons Natomas for Bengal offshore in early seventies,

Assamerc for Cauvery offshore and Reading and bates for Kutch offshore also in early

seventies and later since the first round in 1980; Shell for Kerala offshore and Chevronn-

Texaco in Krishna - Godavery Offshore). This was certainly not as much as elsewhere in the

world.

Seventh and Eighth Rounds of exploration bidding were announced between 1991 and

1994. For the first time Indian companies with or without previous experience in E&P

activities were permitted to bid starting with the Fourth Round.

The Government then announced the Joint Venture Exploration Program in 1995. The

exploration blocks were in those areas for which the Petroleum Exploration License was with

the NOCs and they were required to have a 25% to 40% Participating Interest from day one.
Foreign Companies in Exploration in India

Foreign companies entered the Indian E&P scene since early fifties (Indo Stanvac Project- A

Joint Venture between Government of India and Standard Vacuum oil Company for West

Bengal onland in early fifties, Carlsbons Natomas for Bengal offshore in early seventies,

Assamerc for Cauvery offshore and Reading and bates for Kutch offshore also in early

seventies and later since the first round in 1980; Shell for Kerala offshore and Chevronn-

Texaco in Krishna - Godavery Offshore). This was certainly not as much as elsewhere in the

world.

Indian E&P Companies

Most of the Indian companies barring HOEC have been riding piggyback on the foreign

companies for exploration and development ventures in India. In this regard, Reliance
Petroleum Ltd. has taken the first step by joining up with ONGC in bidding for exploration as

well as development ventures in India and abroad. Some of the downstream companies like

IOC, GAIL has entered also upstream in consort with ONGC and OIL.

Opening of the Oil/Gas Fields for Development by Private

Companies

The Indian oil/gas fields discovered by the two NOCs, were first offered in 1992
under the First
Offer. The second such offer was made in 1993. Development of fields is
characterized by a